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Which of the graphs below best illustrates what happens in US labor markets when US income taxes are reduced? Panel (a) Panel (b) An Increase

Which of the graphs below best illustrates what happens in US labor markets when US income taxes are reduced?

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Panel (a) Panel (b) An Increase in Labor Demand A Decrease in Labor Demand S W 2 Wage per unit of labor Wi Wage per unit of labor Di D2 D2 D1 LI L2 L2 Employment per period Employment per period Panel (c) Panel (d) An Increase in Labor Supply A Decrease in Labor Supply S2 S1 S $2 Wage per unit of labor W Wage per unit of labor W2 - D1 L1 L2 L2 Employment per period Employment per period

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